How Will The Polyester Filament Market Be Interpreted in 2022?

According to price monitoring, the polyester filament market will continue to fluctuate upward in 2021. Throughout the year, polyester FDY (150D/96F) rose 24.65%, POY (150D/48F) rose 21.87%, and DTY (150D/48F low bounce) rose 14.01 %.

From January to mid-March, due to the impact of the domestic epidemic on crude oil, many places implemented the in-situ New Year's policy. Before the Spring Festival, there were optimistic expectations for the post-holiday demand. The downstream speculative demand increased, and the cost of crude oil rose sharply, boosting the price and boosting prices. . After that, with the hype of raw material prices rising to a high level, coupled with the average actual demand after the holiday, some of the demand was overdrawn before the holiday, which led to a decline in the enthusiasm of downstream speculative stocking, and prices fell; Weak orders fell back in August. In mid-September, under the support of the obvious positive effects of rising raw materials again, it reached the highest price of the year at the end of October. Finally, under the influence of dual control and weak demand, prices fell.

In 2021, it is mainly boosted by costs. It is expected that there will still be many negative factors in the polyester filament market in 2022. Specifically:

Supply will continue to increase

In recent years, the production capacity of my country's polyester filament industry has continued to expand. The production capacity of polyester filament is increasing year by year, and the total production capacity will reach 43.26 million tons by 2020. It is understood that in 2021, the supply of polyester filament will continue to increase during the year, with 2.67 million tons of polyester filament per year.

In general, the supply of polyester filament continued to increase during the year. During the year, the polyester production capacity was 4.1 million tons/year, of which polyester filament was 2.67 million tons/year, accounting for 65.12%, and the growth rate of polyester filament production capacity was 8.21%. Specifically, the production capacity is mainly concentrated in the second half of the year, but from August to October, due to the impact of the national double control policy, there is a blank period for polyester filament production capacity. In 2022, according to statistics, the new domestic production capacity of polyester filament will be more than 5 million tons. Considering that the current national double control policy and the epidemic situation will affect the progress of production capacity, it is expected that the actual effective production capacity will be 2.5-3 million tons in 2022. nearby, with a year-on-year increase of around 7.8%. Competition among leading enterprises in the southeastern coastal areas of my country will be further intensified, the industry concentration will be further enhanced, and the supporting industry chain will be more complete. However, the growth rate of downstream demand may slow down, and oversupply will still be a major problem in the future.

Cost support will weaken

In 2021, crude oil has been advancing rapidly, rising in shock, hitting a new high in recent years. According to the monitoring of the business agency, WTI crude oil surged from US$48 at the beginning of the year to above US$80 in late October, and fell back and adjusted at the end of the year. In 2021, the overall annual increase of WTI will reach 55.39%, and the increase of Brent crude oil will be 50.65%. The core logic of the rise in oil prices in 2021 is basically highly related to the evolution of the epidemic. In addition, against the macro backdrop of inflation expectations, tightening supply and economic recovery also provide impetus for oil prices to rise. However, global crude oil supply will continue to grow in 2022, approaching pre-pandemic levels. Negotiations on the Iran nuclear deal are restarted, Iranian crude oil may return to the market, and OPEC is also carrying out its production increase plan as normal. The release of strategic inventories by many countries has caused a marginal increase in supply, causing greater supply pressure. In addition, the Omicron mutant strain has potential impact on crude oil demand, and the global crude oil supply and demand pattern has weakened. It is expected that the overall supply side of the crude oil market in 2022 will be bearish and the downward driving force will be strong.

PTA is in the second round of rapid capacity expansion cycle in history, and the annual production capacity and output of PTA have reached record highs. By the end of 2021, the nominal production capacity of PTA is 71.22 million tons. Excluding the long-term parking capacity, the effective production capacity is 64.42 million tons. The degree of overcapacity is becoming more and more serious. With the rapid expansion of domestic production capacity, the integration of equipment and large-scale development competition, the industry The excess pressure is further aggravated, and the benefit is further compressed.

In the short term, PTA is boosted by the continuous upward trend of crude oil, and will continue to rise. However, in the long run, the focus of international crude oil supply and price operation will fluctuate and move downward. In addition, various products in the PTA industry are in a capacity expansion cycle. In 2022, the production capacity of PTA is still at the peak of production. It is expected that more than 10 million tons of new production capacity will be put into use. The expansion rate of the upstream is much faster than that of the downstream, and the terminal demand continues to grow back, so the supply pressure of PTA in 2022 will not be reduced.

Weak recovery in end demand

In 2021, the average operating rate of Jiangsu and Zhejiang looms will be 69%, an increase of 8 percentage points from 2020. In the first half of the year, the orders were relatively good, at the same historical level, and in the second half of the year, the orders were average, and the power cuts in some areas in Jiangsu and Zhejiang remained, and the overall weaving processing rate weakened.

From the perspective of the terminal textile industry, according to the National Bureau of Statistics data, from January to November 2021, the retail sales of clothing, shoes, hats, and knitted textiles reached 1,236.3 billion yuan, a year-on-year increase of 14.9%. The domestic demand market for textiles and apparel has recovered steadily, mainly due to the low base effect in 2020. In the first half of 2021, domestic terminal textile consumption maintained rapid growth, but the sales growth rate dropped significantly in July and August, and continued to decline for many months, and some months were lower than the same period last year. Overall, the domestic demand market is showing a weak recovery, and the future trend is expected to continue.

In terms of exports, the national textile and apparel exports in 2021 will be 315.47 billion US dollars, a year-on-year increase of 8.4%, surpassing 2014, a record high, and an "exceedingly expected" growth. The reason for the dazzling export performance is still due to the epidemic, and the domestic market continues to supplement the lack of international supply. Overseas has already carried out a round of replenishment in 2021, but it has not returned to the level before the epidemic. It is expected that in 2022, especially in some countries in Southeast Asia, the supply will gradually recover, the substitution effect will weaken, and domestic textile and clothing exports will face a decline.

On the whole, as the Spring Festival holiday is approaching, downstream weaving factories have been on holiday one after another, and the operating rate has dropped below 15%. In the short term, supported by favorable costs, prices are generally adjusted steadily. In the medium and long term, the supply of crude oil is bearish. Various products in the PTA industry are still in the cycle of capacity expansion. The expansion rate of the upstream far exceeds that of the downstream, so the cost support will decline. In addition, the terminal demand side will continue to recover and grow, so the overall trend of polyester filament prices will fall in 2022.